The Business Costs And Revenue Quiz Part- I

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| By Katecambel

Katecambel

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Quizzes Created: 6 | Total Attempts: 4,578

Questions: 8 | Attempts: 409 | Updated: Mar 20, 2023

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A few questions about the sixth chapter from the IGCSE Business Studies book: Business Costs and Revenue

Questions and Answers

1.

Do managers and owners need business cost?
- A.
  
  Yes
- B.
  
  No
Correct Answer
A. Yes

Explanation
Managers and owners need to consider business costs in order to make informed decisions about budgeting, pricing, and profitability. Understanding and managing costs effectively is crucial for financial success and sustainability. By analyzing costs, managers and owners can identify areas of inefficiency, implement cost-saving measures, and ensure that resources are allocated wisely. Additionally, monitoring costs allows them to assess the financial health of the business and make necessary adjustments to stay competitive in the market.

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2
0
2.

What is business cost?
- A.
  
  The need to calculate profit and loss
- B.
  
  The need to buy goods and services
Correct Answer
A. The need to calculate profit and loss

Explanation
Business cost refers to the expenses incurred by a company in order to operate and generate revenue. This includes various factors such as purchasing goods and services, paying employee salaries, rent, utilities, and other overhead expenses. By calculating profit and loss, businesses can determine their financial performance and make informed decisions regarding pricing, cost reduction, and overall profitability. Therefore, the need to calculate profit and loss is an essential component of understanding and managing business costs.

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3.

What is the break-even chart used for?
- A.
  
  To draw random graphs
- B.
  
  To play with money
- C.
  
  To compare costs with revenue
- D.
  
  To do something with it
Correct Answer
C. To compare costs with revenue

Explanation
The break-even chart is used to compare costs with revenue. It helps in determining the point at which a business or project will cover all its expenses and start generating profit. By plotting the fixed costs, variable costs, and revenue on the chart, one can visually analyze the relationship between costs and revenue and identify the break-even point. This tool is beneficial for businesses to make informed decisions regarding pricing, sales volume, and profitability.

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4.

State one example of a fixed cost
- A.
  
  Rent of factory
- B.
  
  Vehicle of factory
- C.
  
  Cash of factory
Correct Answer
A. Rent of factory

Explanation
One example of a fixed cost is the rent of a factory. Fixed costs are expenses that do not change with the level of production or sales. In this case, the rent of the factory remains constant regardless of the number of units produced or sold. It is a recurring cost that the business has to pay regularly, regardless of its performance. Therefore, the rent of the factory is a fixed cost.

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5.

What is meant by variance from budget?
- A.
  
  The money earned
- B.
  
  The difference between a budget figure an actual result
Correct Answer
B. The difference between a budget figure an actual result

Explanation
The term "variance from budget" refers to the difference between a budgeted amount and the actual result achieved. It measures the deviation or variance between the planned or expected amount and the actual amount. This variance can be positive if the actual result exceeds the budgeted amount, indicating a favorable outcome, or negative if the actual result falls short of the budgeted amount, indicating an unfavorable outcome. Monitoring and analyzing variances from the budget helps in identifying areas of success or areas that require attention and adjustment in order to achieve financial goals.

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6.

A budget is a detailed financial plan for the future.
- A.
  
  True
- B.
  
  False
Correct Answer
A. True

Explanation
A budget is a detailed financial plan for the future. It outlines the expected income and expenses over a specific period of time, helping individuals or organizations manage their finances effectively. By creating a budget, one can allocate funds for various needs, set financial goals, and make informed decisions about spending and saving. Therefore, the statement "A budget is a detailed financial plan for the future" is true.

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7.

The difference between price and fixed cost is the definition of the contribution made by a product.
- A.
  
  True
- B.
  
  False
Correct Answer
B. False

Explanation
The difference between price and variable cost.

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8.

The quantity of units sold multiplied by the selling price is called the total revenue of a business.
- A.
  
  True
- B.
  
  False
Correct Answer
A. True

Explanation
The statement is true because the total revenue of a business is calculated by multiplying the quantity of units sold by the selling price. This is a basic concept in business and economics, where revenue is a measure of the income generated from the sale of goods or services. By multiplying the number of units sold by the price at which they are sold, we can determine the total amount of money earned by the business.

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Current Version
Mar 20, 2023

Quiz Edited by
ProProfs Editorial Team
Apr 27, 2010

Quiz Created by
Katecambel

The Business Costs And Revenue Quiz Part- I

Do managers and owners need business cost?

What is business cost?

What is the break-even chart used for?

State one example of a fixed cost

What is meant by variance from budget?

A budget is a detailed financial plan for the future.

The difference between price and fixed cost is the definition of the contribution made by a product.

The quantity of units sold multiplied by the selling price is called the total revenue of a business.